The American society is at the cusp of transformative change. With Baby Boomers of the sixties now reaching retirement age, the proportion of older people in society is going to increase. A smaller base of working population will have to support a larger slab of older people. As a result, existing frameworks of social security, Medicare and Medicaid would prove inadequate. New ways and means need to be explored to sustain the concept of an equitable and caring society that has been built in the USA. In this context, it is essential to explore the effect of the changing paradigms of social security, Medicare and Medicaid on the social work field.
The scope of the crisis facing social security and Medicare is stark: the proportion of older people to the younger generation is set to increase from one in eight to one in five over the next twenty three years. This has led to debates as to the modalities of continued funding of social security and Medicare. In their article “The Value of Social Security and Medicare to Families,” Feder and Friedland assess the rationale of social insurance programs and determine the landscape in the absence of social insurance to arrive at suggestions for policy reform.
Social security and Medicare are best viewed as insurance programs for society. Social security covers the uncertainty of when individuals would be unable to continue with productive work, what quantum of assistance they would require and for how long such assistance would be required. Medicare covers the uncertainty of the amount of healthcare required in the advancing years (Feder and Friedland).
Social security and Medicare differ from private insurance over the fact that contribution to these programs is mandatory. While Medicare’s Part B program is not mandatory, nearly everyone subscribes to it. Universal subscription to social security and Medicaid obviates a major lacuna in private insurance schemes: being profit oriented and risk averse, private insurance agencies avoid extending coverage to high risk people and those with existing medical conditions. Thus, universal coverage is a unique aspect of social security and Medicaid programs (Feder and Friedland).
The impact of social security and Medicaid has been beneficial to society. The underlying social insurance has had the positive effect of extending life expectancy and reducing poverty. Poverty reduction has occurred because of the government’s policies to allocate inflation-indexed percentages of incomes towards social insurance. As the nation got wealthier in the seventies, more money was automatically allocated to social insurance. Older and poorer people no longer had to expend resources towards healthcare. As a result, poverty levels reduced. In a way, those who contributed to the nation’s growth in the last generation now benefit form the insurance of social security and Medicaid. Prior to Medicaid, there were many people outside the medical insurance net due to pre-existing health conditions or inability to pay premiums. The positive spinoffs of Medicaid include support to specialty hospitals and funding of graduate medical and nursing education. With social insurance in place, the younger generation can concentrate on providing resources for children and their own retirement, instead of having to look back towards the older generation (Feder and Friedland).
A section of society believes that if social insurance contributions were not mandatory, people would have been able to avail the same levels of protection privately at lower rates. However, an analysis of current rates reveals that the difference in payment of premiums would be marginal at best: while people have to contribute 15.3% of his pay towards the federally mandated “FICA” payments at present, they would have to contribute 15.4% of their resources towards private insurance to avail the same levels of protection. Despite the seeming parity between the two methods of protection, it must be remembered that not all people would be able to opt for private protection; inability to pay and lack of fiscal discipline would throw many people off the social insurance net. Unexpected expenses would also have the potential to throw private insurance efforts into disarray (Feder and Friedland).
Despite the evident advantages of social insurance, there is widespread clamor for reviewing the policy for funding social insurance programs due to the growing disparity between the program’s financiers and recipients. The working age population that funds social insurance is shrinking in relation to the older generation who would benefit from social insurance. While social security payments and revenues on past incomes would be inadequate to meet expenditures by 2028, Medicare revenues would fall short of projected costs by 2019. Analysts point out that the solution to the impasse would lie in either raising revenues or cutting back on benefits. Politicians, on the other hand, argue in favor of ‘reform’ to retain benefits without increasing costs. The way forward, according to politicians, is for the government and the individual to contribute equitably towards equity. As the stock market is likely to appreciate faster than government bonds, the excess funds generated would fill the gap in resources required for social insurance. This paradigm suffers from a number of serious lacunae. The stock market fluctuates; such fluctuation might be inimical to the time a person retires. This would expose individuals to uncertainty, unlike the current dispensation of social insurance. Similar arguments in favor of private healthcare plans are oblivious of the fact that private healthcare agents would not cover people with pre-existing conditions and those at greater risk (Feder and Friedland).
While Feder and Friedland have rightly pointed out the need to continue with social insurance mechanisms in their current format, they have not come up with solutions of how to meet the demand –resource gap in future.
There have been clamors for Medicare to hold the price line in the payments made for medical services. However, this approach can only be taken with caution. Medicare services need to be on par with private medical insurance companies on the issue of payments (Moon). If Medicare were to be less attractive to doctors and hospitals, patients covered by Medicare might not get the necessary care and attention. Therefore, the option to hold the price line by optimizing payments is only a limited solution to meet the demand-resource gap in social insurance.
One option to bridge the demand-resource gap is by restructuring the underlying social work landscape. The extension of social insurance to the population requires social workers. Social workers are required to explain the benefits of various schemes to people, to do the back end clerical and managerial jobs, to act as paramedics and even to contribute to the nursing profession. As such, a substantial portion of the social insurance costs is consumed by the social work sector. If the social work sector were to be reformed, it might lead to savings in social insurance and allow for the current schemes to run for a longer time.
There is a crisis of quality in social work. If social workers were to be professionally trained, they could handle gerontological social work more effectively. The interest of the younger generation in social work would be enhanced, allowing more people to enter this field (Baskind and Briar-Lawson). Efficiency in the social work sector would translate to savings in the social insurance framework.
Freeing the social work sector from the modicum of regular payments is another method to reduce the financial burden of the social work sector. Suitable social work could be outsourced. Back office operations of Medicare are prime candidates for such outsourcing. According to Gibelman, the average pay for a starting level job in India is $260, while it is five fold in the USA. Therefore, if back office operations of social security and Medicare were outsourced, the state would save on the costs incurred in social insurance. Resources would be better employed on medical procedures, purchase of medicines and doctors’ fees rather than on back office operations. The concept of temporary positions could be extended to the social sector. For instance, social workers might do added roles as physical training instructors in schools. On surges of demand, they could be employed as paramedics. Such solutions would require clear mechanisms of quality control to be in place (Gibelman).
There is a crisis in the balance of payments for social insurance schemes that cover the American population. Resources would be inadequate to meet the costs of social security, Medicare and Medicaid over the next ten to fifteen years. The option to divert contributions towards equity to bridge the resource gap is fraught with risk. Holding the price line of payments for medical services would render the social insurance services unattractive and uncompetitive. The only viable method to bridge the resource gap is by streamline the social work sector. Professional training would add to the efficiency of the sector. Outsourcing of back office operations is a viable option to reduce costs. A holistic restructuring of the social work sector is, therefore, the need of the hour to meet the impending resource gap facing the social insurance framework of the nation.
Baskind, Frank R., and Briar-Lawson, Katherine. “Advancing Social Work with Older Adults.” Families in Society 86.3 (2005): 424-430. Web. 08 Oct 2014.
Feder, Judith, and Friedland, Robert B. “The Value of Social Security and Medicare to Families.” Generations 29.1 (2005): 78-85. Web. 08 Oct 2014.
Gibelman, Margaret. “Social Workers on Rent: The Contingency Human Services Labor Force.” Families in Society 86.4 (2005): 457-469. Web. 08 Oct 2014.
Moon, Marylin. “Confronting the Rising Costs of Healthcare in Medicare and Medicaid.” Generations 29.1 (2005): 59-64. Web. 08 Oct 2014.